FAR 8.700:  Javits-Wagner-O'Day Act

Comptroller General - Key Excerpts

Finally, we turn to the substance of the protesters’ assertion that GSA’s actions violate the clear provisions of the JWOD Act and its implementing regulations. The crux of the protesters’ complaint is that GSA has improperly failed to either contract directly with Goodwill for performance of the custodial services at the Charlottesville courthouse or require VVP to contract with Goodwill for those services.

In response, GSA does not assert that its actions comply with the statutory and regulatory requirements. Rather, GSA asserts that the award of a lease for real property is not subject to the requirements of the JWOD Act and its implementing regulations. Agency Report, Sept. 26, 2017, at 10-12. We disagree.

First, GAO has previously explained that similar procurement statutes and regulations apply to the “acquisition of real property leasehold interests,” concluding “there is little dispute that a real property lease is a ‘contract’.” See The Argos Group, LLC, B‑406040, Jan. 24, 2012, 2012 CPD ¶ 32 at 4; General Services Administration--Recon., B‑406040.2, Oct. 24, 2012, 2012 CPD ¶ 297 (lease awards are subject to statutory provisions implementing socioeconomic programs such as the HUBZone program). Further, GSA cites to no statutory provision, nor to any other authority, for the proposition that lease procurements are exempt from the JWOD Act requirements. Finally, the plain language of the JWOD Act and its implementing regulations provides no exception for leases. Rather, the language of the Act broadly applies to all procurements that are conducted by “[a]n entity of the Federal Government”--with the only exception to the Act’s mandatory source requirements being applicable to acquisitions from Federal Prison Industries, Inc. 41 U.S.C. § 8504(b). Accordingly, we reject GSA’s assertion that a lease for real property is not subject to the JWOD Act requirements.

As discussed above, the record here establishes that: (1) the custodial services at issue are included in the AbilityOne Commission’s procurement list; (2) the JWOD Act requires that services on the procurement list be purchased from the AbilityOne organization designated by the Commission; (3) Goodwill is the AbilityOne organization designated as the mandatory source for the custodial services; and (4) the Act and its implementing regulations expressly provide that, when services on the AbilityOne procurement list are included in the procurement of larger services, the contracting activity “shall require” the contractor for the larger services to procure the AbilityOne services from the organization designated by the AbilityOne Commission. In short, GSA is leasing a building that requires custodial services and, rather than procuring those services through the mandatory source that has been designated pursuant to the JWOD Act (or directing the lessor to do so), GSA has bundled the janitorial services into the lease without regard to the Act.

On this record, we reject GSA’s apparent premise that it may, in effect, avoid compliance with the requirements of the JWOD Act and its implementing regulations by including the AbilityOne custodial services for the Charlottesville courthouse within a “full service” lease to VVP.

The protest is sustained. (Goodwill Industries of the Valleys; SourceAmerica B-415137: Nov 29, 2017)

As discussed above, GSA clarified Q&A No. 80.1.c, explaining that contractors operating brick and mortar stores must be certified by AbilityOne, and must comply with AbilityOne requirements to be eligible for award under CLIN No. 4. GSA Corrective Action Letter (Apr. 21, 2014), Tab 1, GSA Clarification Notice. The agency contends that its clarification addressed the protester’s arguments concerning compliance with the JWOD Act, and that no further revisions to the solicitation are needed.

NIB argues that GSA’s clarification is not sufficient to ensure compliance with the JWOD Act, because AbilityOne does not have specific procedures to require brick and mortar stores to block sales of commercial ETS products. In this regard, NIB notes that AbilityOne requires prospective vendors of products on the Procurement List to be approved for such sales, and publishes Criteria for AbilityOne Distributors, which explains the process for approval; however, these criteria do not expressly address sales of commercial ETS products through brick and mortar stores. For this reason, the protester argues that GSA should either (1) cancel the solicitation provision that authorizes sales through brick and mortar stores, or alternatively, (2) amend the solicitation to require that offerors with brick and mortar stores not sell commercial items that are essentially the same as those on the Procurement List.

GSA responds that AbilityOne certifies vendors without regard to their method of sales (e.g., online or brick and mortar stores). The agency further contends that the absence of a specific approval for brick and mortar stores does not show that such vendors are ineligible for certification by AbilityOne, or that the solicitation’s reliance on certification by AbilityOne violates the JWOD Act. For the reasons discussed below, we agree with the agency and find no basis to sustain the protest.

As relevant here, prospective vendors must explain how their ordering system precludes purchases of [essentially the same] ETS, as follows:

The distributor must abide by the AbilityOne exclusivity principle, i.e., not to sell any commercial products to Federal customers if those products have been deemed “essentially the same” (ETS) as AbilityOne products. As a result, distributors should refrain from marketing both A- and B-List ETS commercial products on federal contracts, including the GSA Schedule and DoD E-Mall. . . . . Distributors must be able to explain and demonstrate how [their] ordering system will automatically block commercial ETS products and substitute the appropriate AbilityOne products. An automated blocking system is strongly preferred.

Criteria for AbilityOne Distributors ¶ 3. Additionally, for electronic catalogs, the AbilityOne provisions state as follows:

The AbilityOne Program requires that electronic (on-line and/or CD) catalogs fully integrate AbilityOne products into all search features as well as other pages where applicable. . . . Removal of all ETS items is required if the site is dedicated to federal customers. If the electronic catalog is part of a distributor’s commercial electronic catalog, the firm must still block the sale of ETS products to federal customers.

Id. ¶ 5.

NIB notes that the AbilityOne’s authorization procedures do not specifically address the prohibition on the sale of ETS in the context of brick and mortar stores. In contrast, the provisions quoted above require vendors who offer products through online systems to have a blocking system. Criteria for AbilityOne Distributors ¶¶ 3, 5. NIB also contends that the lack of a specific ETS enforcement provision in the RFP for brick and mortar stores places NIB at a disadvantage, because without such a provision, it is “highly likely” that large commercial firms would offer ETS products in their brick and mortar stores in violation of the JWOD Act. Protester’s Comments (Apr. 25, 2014) at 2. In addition, NIB argues that these commercial firms will likely offer “low ETS prices, name recognition, greater range of products, etc.” Id.

GSA argues that AbilityOne requirements apply to vendors without regard to a specific sales channel, e.g., online, or brick and mortar stores. AR at 3. GSA notes in this regard that the Criteria for AbilityOne Distributors does not set forth unique requirements for firms that operate brick and mortar stores, nor do the Criteria prohibit such firms from receiving authorization to be an AbilityOne distributor. For this reason, the agency contends, the solicitation as written complies with the JWOD Act because GSA may rely upon AbilityOne’s authorization agreements with vendors. AR at 6.

GSA notes that AbilityOne is the designated agency responsible for authorizing vendors to sell products under the AbilityOne program. AR at 5; 41 C.F.R. § 51-1.3. The AbilityOne Commission is responsible for “[e]stablish[ing] rules, regulations, and policies to assure effective implementation of the JWOD Act.” 41 C.F.R. § 51-2.2(a). GSA contends, and we agree, that to the extent unique requirements should be adopted for firms operating brick and mortar stores, those requirements must first be established in the vendor’s agreements approved by AbilityOne, and then negotiated with the authorized distributors.

With regard to the solicitation, GSA explains that offerors for CLIN No. 4 must demonstrate that they are an AbilityOne certified firm, RFP, SOW, at 36, and must provide GSA an authorization letter from AbilityOne; GSA, in turn, will confirm the authorization of each offeror with AbilityOne. Contracting Officer Statement (Apr. 30, 2014) at 1; RFP, Attach. 10, OS3 Checklist Information and Instructions for Solicitations at 4. AbilityOne’s confirmation of the authorization is considered the final determination in this matter; GSA has no discretion to second-guess AbilityOne’s authority in this area. Contracting Officer Statement (Apr. 30, 2014) at 1. The agency also states that it will conduct end-user training to reinforce the obligation of buyers with regard to the Procurement List. AR at 4.

On this record, we find no basis to sustain the protest. We see no requirement in the JWOD Act, the FAR, or any regulations or policies issued by AbilityOne, that requires an agency such as GSA to include more specific solicitation provisions to block the purchase of ETS merchandise at commercial brick and mortar stores. Instead, the relevant statutes and regulations provide AbilityOne with the authority to set the requirements for vendors under the JWOD Act. Because the solicitation relies on AbilityOne’s authorization agreements with commercial vendors, we find that the RFP complies with the JWOD requirements.

Finally, NIB argues that GSA improperly failed to reopen the competition following the clarification of the solicitation regarding brick and mortar stores. The protester argues that the clarification was a material revision to the terms of RFP, and that offerors would have likely required revisions to their proposals. NIB Response to Summary Dismissal Request (Apr. 24, 2014) at 3. We find no basis to sustain the protest based on this concern. Even if the agency’s clarification could be construed as a new requirement, we find that the protester was not prejudiced because, as the protester has repeatedly stated, it cannot compete without a further amendment to the solicitation that would require offerors to block the sale of ETS products at commercial brick and mortar stores in a manner analogous to the requirements for online sales. See id. at 2-3; Protester’s Comments (Apr. 25, 2014) at 2. Because, as discussed above, we find no basis to conclude that the agency was required to include such a solicitation provision, we find no basis to sustain the protest.

The protest is denied.  (National Industries for the Blind, B-409528.20: Jul 2, 2014)  (pdf)

OSC Solutions, Inc. of West Palm Beach, Florida, protests the General Services Administration's (GSA) cancellation of a request for quotations (RFQ) and subsequent sole-source award of a blanket purchase agreement to the Industries of the Blind, Greensboro, North Carolina (IBNC), for tarps.

(sections deleted)

OSC Solutions argues that GSA could not issue the blanket purchase agreement and orders to IBNC under the authority of the JWOD Act, because the tarps are not on the JWOD procurement list. Given that the agency could not purchase the tarps from IBNC under the authority of the JWOD Act, OSC Solutions argues that the agency did not have a reasonable basis to cancel the RFQ, where OSC Solutions had submitted a responsive quotation.

A contracting agency needs a reasonable basis to support a decision to cancel an RFQ. Deva & Assoc. PC, B-309972.3, Apr. 29, 2008, 2008 CPD para. 89 at 3. We have recognized that a solicitation may be cancelled where, during the course of the procurement, the item or services involved are discovered to be on, or have been added to, the JWOD procurement list. See Best Foam Fabricators, Inc., B-259905.3, June 16, 1995, 95-1 CPD para. 275 at 2; Microform Inc., B-246253, Nov. 13, 1991, 91-2 CPD para. 460, aff'd on recon., B-246253.2, Mar. 31, 1992, 92-1 CPD para. 338.

Here, we find that GSA had no reasonable basis to cancel the RFQ, because the tarps obtained from IBNC under the authority of the JWOD Act are not on the procurement list.[8] Accordingly, GSA's noncompetitive purchase of the tarps was not authorized by the JWOD Act. See JAFIT Enters., Inc., supra, at 2. Given that the noncompetitive purchase of the tarps from IBNC under the JWOD Act was the agency's only documented basis for cancellation of the RFQ, we find that GSA did not have a reasonable basis to cancel the RFQ.

GSA nevertheless argues that OSC Solutions was not prejudiced by the agency's cancellation of the RFQ. Specifically, GSA contends that it could have issued an order under the RFQ to IBNC[9] or to Premier and further argues that it would not have issued an order to OSC Solutions under the RFQ because the firm's quoted delivery schedule was too long. Our Office will not sustain a protest unless the protester demonstrates a reasonable possibility that it was prejudiced by the agency's actions, that is, unless the protester demonstrates that, but for the agency's actions, it would have had a substantial chance of receiving the award. McDonald‑Bradley, B‑270126, Feb. 8, 1996, 96‑1 CPD para. 54 at 3; see Statistica, Inc., v. Christopher, 102 F.3d 1577, 1581 (Fed. Cir. 1996).

We find a reasonable possibility that OSC Solutions was prejudiced by GSA's cancellation of the RFQ and improper issuance of orders to IBNC under the JWOD Act. GSA's arguments do not establish that there was no reasonable possibility that OSC Solutions would not have had a substantial chance of receiving an order under the RFQ. OSC Solutions raised colorable arguments disputing whether Premier or IBNC offer TAA-compliant tarps that would satisfy the RFQ requirements. We did not address these arguments, given the agency's cancellation of the RFQ.[10] With respect to the agency's arguments that the delivery schedule quoted by OSC Solutions was too long, the contemporaneous record does not show that the agency considered OSC Solutions's quotation to be unacceptable, either due to the quoted delivery schedule or for any other reason.

We sustain the protest. While we would normally recommend that the agency cancel the orders to IBNC and consider issuing an order or orders under the RFQ, GSA has advised us that it terminated for convenience the orders issued to IBNC, after having received 68,406 tarps, and conducted a limited competition for the remaining 93,393 tarps, under which GSA received a quotation from OSC Solutions. Given that there is no longer a requirement for the tarps and that OSC Solutions was given an opportunity to compete for a portion of the tarps, we recommend that OSC Solutions be reimbursed a pro‑rated amount of the firm's costs of quotation preparation, see Hydro Research Sci., Inc.--Costs, B-228501.3, June 19, 1989, 89-1 CPD para. 572 at 5‑6, and reimbursed its costs of filing and pursuing the protest, including reasonable attorneys' fees. 4 C.F.R. sect. 21.8(d)(1), (2) (2009). OSC Solutions should submit its certified claim for costs, detailing the time expended and costs incurred, directly to GSA within 60 days after the receipt of this decision.  (OSC Solutions, Inc., B-401498, September 14, 2009) (pdf)

Cancellation of request for quotations (RFQ) for 1 year of janitorial and grounds maintenance services, with 4 option years, on the basis that the services had to be procured pursuant to the Javits-Wagner-O'Day (JWOD) Act, was improper where only services for 240 days or fewer had to be acquired under the statute. Related RFQ to cover a shorter term properly was canceled, however, since a reasonable basis existed for cancellation.  (Aleman & Associates, Inc., B-287275.2; B-287356.2, July 2, 2001)

Comptroller General - Listing of Decisions

For the Government For the Protester
  Goodwill Industries of the Valleys; SourceAmerica B-415137: Nov 29, 2017
National Industries for the Blind, B-409528.20: Jul 2, 2014  (pdf) OSC Solutions, Inc., B-401498, September 14, 2009 (pdf)
  Aleman & Associates, Inc., B-287275.2; B-287356.2, July 2, 2001

U. S. Court of Federal Claims - Key Excerpts

Systems Application & Technologies, Inc. (“SA-TECH”) is the incumbent contractor for the Army for “Operation and Maintenance of the Multipurpose Ranges and Facilities Services” at the Yakima Training Center (“YTC”), in western Washington state. The YTC is used as a training area for large-scale military maneuvers involving heavy wheeled and tracked vehicles, including tanks and long-range weapons.

(section deleted)

The site is in a remote desert area. The closest hospital is 30 miles away. There is no public transportation to the site. All the current job descriptions require that employees be able to drive, lift up to 100 pounds, engage in strenuous physical exertion during stressful conditions, and be available 24 hours a day.

The Army proposes taking this work away from the incumbent, with whom it has no complaint, at the expiration of the contract in order to give the work to the intervenor, Skookum Educational Systems (“Skookum”), who promises to do the work using at least sixty percent severely disabled workers. Under the terms of the applicable statute, severely disabled workers cannot be otherwise competitively employable. 41 U.S.C. § 8501(8) (Supp. V 2012). Skookum has “zero” experience with this precise type of work. AR 2525.

While to an outsider it would appear that what the Army proposes is sheer folly, the government has aggressively defended its actions as permissible under the Javits-Wagner-O’Day Act (“JWOD”), 41 U.S.C. §§ 8501-506. That act authorized creation of the Committee for Purchase from People Who Are Blind or Severely Disabled (the “Committee” or “AbilityOne”). Id. § 8502; see Pub. L. No. 95-739, 52 Stat. 1196 (1938) (“That there is hereby created a Committee . . . to determine the fair market price of all brooms and mops and other suitable commodities manufactured for the blind and offered for sale to the Federal Government . . . .”). The purpose of the Committee is to “increase employment and training opportunities for persons who are blind or have other severe disabilities.” 41 C.F.R. § 51-1.1(a) (2012). A “severely disabled” individual is the following:> [A] person other than a blind person who has a severe physical or mental impairment (a residual limiting condition resulting from an injury, disease, or congenital defect) which so limits the person’s functional capabilities (mobility, communication, selfcare, self-direction, work tolerance, or work skills) that the individual is unable to engage in normal competitive employment over an extended period of time. 41 C.F.R. § 51-1.3.

(section deleted)

The Committee held an Executive Session on April 24, 2012, at which representatives of SA-TECH and Skookum were permitted to make presentations. AR 2490. During the session, committee member Kathy Martinez told plaintiff’s counsel,

I am very concerned about your concept of what a significant disability means and what people with significant disabilities can do? I happen to be a blind person. I don’t work on a shooting range, but I am you know, a significant, I am a person with a significant disability who is employed. And, I am unaware that the term significant disability means that you can’t hold down a job.

AR 2508.  After plaintiff’s counsel read the statutory definition of “severely disabled,” Ms. Martinez replied, “I think that’s a very antiquated definition frankly.” Id.

On July 20, 2012, the Committee again voted to add the YTC contract to the Procurement List. Nine members voted in favor, one was undecided, and three disapproved. AR 2566. The three dissenting members of the Committee expressed doubts as to the propriety of awarding this contract through AbilityOne. They were concerned because the principal behind the incumbent contractor was a disabled person who employed service disabled and other veterans, the work did not seem safe for severely disabled individuals, Skookum was allowed a long phase in period and a low goal for the percentage of severely disabled individuals employed, and Skookum had not presented a plan for transporting severely disabled individuals 33 miles to and from YTC. See AR 2567.


We conclude for reasons set out below that the Committee acted in an arbitrary and capricious way in placing the YTC contract on the Procurement List, irrespective of whether it erred in not requiring Skookum to reach the 75% severely disabled level for the YTC contract.

Plaintiff contends that the agency did not perform a proper suitability assessment pursuant to section 8503(a) of the JWOD Act and its implementing regulations. Under those regulations, the record must demonstrate four things: 1) that putting the contract on the Procurement List has the potential to create jobs for the severely disabled, 2) that Skookum was a qualified entity, 3) that, at the time Skookum would begin doing the work, it had the capability to meet Government quality standards and delivery schedules, and 4) that the Committee evaluated whether taking the contract away from SA-TECH would have an adverse impact on the incumbent. 41 C.F.R. § 51-2.4. Plaintiff argues that none of the four criteria were satisfied, but we will limit ourselves to two: whether the record demonstrates that putting the contract on the Procurement List had the potential to create jobs for the severely disabled and whether Skookum had the capability to meet Government quality standards and delivery schedules. The two questions are related.

The Committee required Skookum to commit to using 60% severely disabled for its direct labor. This meant that at least 20 out of the 30 direct labor employees would be severely disabled. Plaintiff contends that the record does not show either that there was a meaningful prospect of employing anywhere near that number of severely disabled or, if that number were achieved, that severely disabled employees could do the work.

There are a number of contraindications with respect to the likelihood of creating jobs for the severely disabled. First, there is the difficulty of finding a sufficient number of qualified but severely disabled individuals within commuting distance of the ranges. The contracting officer refers to a “dearth” of such persons in the Yakima area and the unwillingness of persons to relocate to Yakima from the Puget Sound area. AR 856. Committee staff cautioned,

The selection of the people with severe disabilities for this particular AbilityOne project will require more rigorous recruiting and training than most other AbilityOne projects. In particular, the need for physical dexterity and mental faculties will reduce the pool of individuals that also meet the Commission’s definition of severely disabled.

AR 1685.

Skookum proposed starting on day one of the contract with nine severely disabled persons. When Skookum was asked about how it would locate such persons, it referred merely to statistics about the “disabled” in the Yakima area. One of the Committee members pointed out that this data could not be relied on with respect to the severely disabled, and referred to Skookum’s figures as a marketing pitch. AR 2528.

None of these nine initial employees were identified by name, by capability, or by disability. Despite the unusually rigorous physical demands of the job, Skookum made no effort to match the requirements of particular jobs with particular disabilities and offered only the vaguest generalities. See AR 2522 (“[T]ypically, we don’t find a match between the AbilityOne definition and the VA definition before you start getting into the 60-70% range. And, even then it’s a case-by-case. But, there are folks out there who will qualify.”); AR 3265 (“We are confident that over the period of 36 months we will obtain the necessary workers . . . .”).

When asked to propose an individual currently working for Skookum who might be able to do the work, Mr. Dolven referred to an employee at the White Sands Missile Range who suffers from acoustic neuroma, bells palsy and has hearing loss. One of the Committee members pointed out, however, that an acoustic neuroma can be benign and that Skookum could “be challenged in regard to whether that individual could be one of the most significant disabled persons.” AR 2523. Equally problematic, however, was that the individual had balance problems and thus could not climb. He was also hearing impaired. Given this particular example, the Committee should have posed the question how someone who cannot climb and has hearing problems could function on the Yakima ranges.

In a memorandum to Committee members, staff suggested that work being performed elsewhere by Skookum with the severely handicapped was comparable to that required at Yakima. They noted that:

Maintenance trade helpers and laborers are among the positions> filled by people with severe disabilities doing the range maintenance work at those locations. The people with severe disabilities employed at White Sands and Fort Bliss have a number of disabilities including major depressive disorder, post-traumatic stress disorder (PTSD) with depressive and anxiety disorder, degenerative joint disease, deafness, polio, borderline intellectual functioning, bipolar and learning disabilities.

AR 1686.

It is uncontroverted that the YTC contract is not the same as the work Skookum does at Fort Bliss and White Sands. Describing the YTC contract as merely “facilities maintenance” makes it sound more like other AbilityOne work, but that description is inaccurate. Conditions on the range are stress-inducing, according to Mr. Adams, and involve the explosion of munitions during live fire. An unavoidable question should have been, is it appropriate to put someone who has severe post-traumatic stress disorder with depressive and anxiety disorder on or even near a live fire range. Or, can someone who has degenerative joint disease or polio meet the physical requirements of the job: “Requires ability to lift and carry boxes and packages not to exceed 100lbs. Requires the physical dexterity to push/pull, climb/balance, bend/stoop, twist/turn, kneel/crouch, crawl, reach overhead, grasp, [and] use feet for foot controls.” AR 2010 (describing the job of a Maintenance Trades Helper).

Instead of asking such questions, the Committee staff shifted the burden to SA-TECH and relied on high-minded policy:

The list supplied by SA-TECH contains factual statements of the contract requirements, but they are not factual evidence that individuals with severe disabilities are inherently incapable of performing the required tasks safely. Moreover, it should not be assumed that Skookum will perform the work in the same way that SA-TECH has in the past.

As the Committee is well aware, throughout history, there are many notable congressional actions that have become law, including the JWOD Act, to dispel the attitude that people with disabilities ‘cannot do that.’ The JWOD Act recognizes that, in the performance of federal contracts, people with disabilities are hired for what they ‘can do.’ . . . In reviewing the list of performance and safety concerns noted, SA-TECH simply wants the reader to accept their unsupported claims that people with severe disabilities cannot perform the functions.

AR 1685. It was not SA-TECH’s burden to show that severely disabled are “inherently incapable” of performing any of the tasks on the YTC contract. It was Skookum’s burden, given the numerous reasons for concern, to show that there were a sufficient number of specific jobs that could be done by severely disabled workers. Instead of thinking critically about whether severely disabled individuals are capable of performing the contract, the Committee criticized SA-TECH for assuming “that Skookum will perform the work in the same way that SA-TECH has in the past,” and uncritically accepted Skookum’s unsupported claim that doing the work in some unspecified different way somehow solves the technical problems posed by the YTC contract.

When asked by one of the Committee members to answer a charge by SA-TECH that Skookum planned to simply re-employ its workforce, Mr. Dolven gave the following response:

Jim Omvig: This is Jim Omvig. I am trying to decide if I should ask this. It has been suggested that you might try to count several people who were on their workforce and classify them as severely disabled even though they know, or even though you know, they do not really meet the significant disability definition here.

Jeff Dolven: Scurrilous accusations. (laughter) I don’t know what to say to that. What we are trying to do is to express our intent which we’d go in and talk to the incumbent workforce, you know. We haven’t talked to these folks. We’re not exactly on speaking terms, but we need to first seek to understand, right. So Jim, what we are trying to say is that we are going to go in, talk to them you know, their president said I have veterans with disabilities, okay let’s talk to them. I am skeptical and was  skeptical at the time that they would have a definite...you know, severe enough disability to count. But, you know I don’t want to categorically say no. But, that’s not typically what we find. If you find someone who is working for a large company then almost by definition they’re employable unless there’s some accommodations in place that are being made, and that happens. There are companies that have a social conscience to do this kind of stuff. But, out of ignorance I am not going to categorically deny them the opportunity; to talk to our HR folks.

AR 2525-27.

Mr. Dolven, in short, did not disavow that his plan to begin with nine severely disabled employees involved the hope that Skookum might be able to reclassify SA-TECH’s existing employees. That was consistent with Ms. Munoz’ understanding that “Skookum estimates that 10% of the current labor force may have conditions to meet the criteria for severely disabled . . . especially if they are vets.” AR 856. This should have triggered a concern that the incumbent would be ousted on the basis of improperly reclassifying persons who were disabled, but not unemployed, or that Skookum did not have a feasible plan for hiring the severely disabled.

It should have been readily apparent to the Committee and [Mission and Installation Contracting Command] MICC that there was an inherent contradiction built into Skookum’s proposal. To the extent Skookum’s capability to the do the work with a significant number of severely disabled individuals was questioned, it retreated to assurances which undercut the likelihood that the contract had the potential to create jobs for the severely disabled: Skookum would initially hire all of the incumbent employees (by definition, none could be severely disabled), it would only attempt to achieve a 60% level of severely disabled instead of the typical 75% and it would not attempt to achieve that until the end of three years of performance, instead of the usual 90 day phase-in.

What should have been equally disturbing was Skookum’s ultimate guarantee that if it couldn’t do the work, it would abandon the effort to achieve even 60% and simply use able-bodied workers. While these assurances might be relevant to meeting the capability requirement, they are obviously at odds with the statutory expectation that a meaningful number of jobs could be created for the severely disabled. Skookum’s efforts to straddle both requirements created a built-in tension in its proposal. It was MICC’s and the Committee’s obligation to identify that tension and resolve it, not to ignore it and in effect turn the procurement into an experiment.

Based on this record, we cannot defer to the conclusion by the MICC and the Committee that there was a potential for creating jobs for the severely disabled. It is of particular concern to the court that the individual at the Army whose responsibility it was to protect the Army’s interests showed an inclination to accept creative applications of the term “severely disabled,” AR 856, 1509, and seemed more eager to promote AbilityOne in general and Skookum in particular than to address the serious misgivings being raised. In addition, some Committee members seemed hostile to statutory limitations on the term “severely disabled,” AR 2508 (“I think that’s a very antiquated definition frankly.”), and the terms “disabled” and “severely disabled” are used interchangeably throughout the record as if there were no distinction. Compare AR 1885 with AR 1669.

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On the basis of the existing record, it was arbitrary and capricious for the AbilityOne Committee to designate the YTC for placement on the Procurement List. Because Skookum was the only contractor being considered, that means that its designation as the contractor for the work was also arbitrary and capricious. Plaintiff therefore succeeds on the merits.

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Plaintiff’s motion for judgment on the administrative record is granted. Defendant’s motion for judgment on the administrative record is denied. Defendant is enjoined from placing the YTC contract on the AbilityOne Procurement List and from contracting with Skookum for the work. The Clerk is directed to enter judgment for plaintiff accordingly. Costs to plaintiff.  (Systems Application & Technologies, Inc., v. U. S. and Skookum Educational Systems, No. 12-526, December 10, 2012)  (pdf)

Magic Brite received the contract at issue under a purchase exception, pursuant to 41 C.F.R. § 51-5.4 and 48 C.F.R. § 8.706. See Def.’s App. at 5-6. The granting of an exception does not have the effect of removing the contract from the JWOD procurement list -- such a “deletion” is accomplished under an entirely different regulation, 41 C.F.R. § 51-6.8. Moreover, the removal of a contract from the JWOD procurement list requires the same notice and comment rulemaking procedures as are followed in adding contracts to the list. See 41 U.S.C. § 47(a)(2) (requiring the Committee to follow 5 U.S.C. § 553(b)-(e) to make additions or subtractions to the JWOD procurement list); see also 41 C.F.R. § 51-2.8(d) (additions to and deletions from the list are published in the Federal Register). Nothing of the sort was alleged to have been followed in the granting of the exception. Since the contract was not removed from the procurement list, the procedures for adding a contract to the list are irrelevant. Magic Brite has not identified any statutory or regulatory requirement that would force the Committee, the GSA, or any other part of the Government to consider the impact on Magic Brite of a decision to return the contract to a NISH-approved agency. Nor does the Solicitation promise any such procedure -- to the contrary, it stresses that the Government’s option is “unilateral” and adds: “The exercise of options is a Government prerogative, not a contractual right on the part of the Contractor.” Ex. 1 to Gomez Aff., § F.3. And in any event, because the 3 contract was still on the JWOD procurement list and the exception had expired, it appears that the Committee and GSA were required by JWOD to award the contract to a NISH-approved agency if any such agency were willing to accept the contact at the specified price. See 41 U.S.C. § 48; see also 41 C.F.R. §§ 51-1.2, 51-5.4; 48 C.F.R. § 8.706. Thus, plaintiff seems to have things backwards -- the default position was not that the option be exercised, but that a NISH approved agency be utilized. (Magic Brite Janitorial, v. U. S., No. 05-1380C, January 19, 2006) (pdf)

U. S. Court of Federal Claims - Listing of Decisions

For the Government For the Protester
Magic Brite Janitorial, v. U. S., No. 05-1380C, January 19, 2006 (pdf) Systems Application & Technologies, Inc., v. U. S. and Skookum Educational Systems, No. 12-526, December 10, 2012  (pdf)


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